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Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: • Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January. • Collections are expected to be 65% in the month of sale and 35% in the month following the sale. • The cost of goods sold is 80% of sales. • The company desires to have an ending merchandise inventory at the end of each month equal to 70% of the next month's cost of goods sol Payment for merchandise is made in the month following the purchase. • Other monthly expenses to be paid in cash are $21,100. • Monthly depreciation is $21,000. • Ignore taxes. Balance Sheet October 31 Assets Cash $ 25,000 Accounts receivable 77,000 Merchandise inventory Property, plant and equipment, net of $624,000 accumulated depreciation 162,400 1,026,000 Total assets $ 1,290,400 Liabilities and Stockholders' Equity Accounts payable $ 239,000 Common stock 740,000 Retained earnings 311,400 Total liabilities and stockholders' equity $ 1,290,400 Retained earnings at the end of December would be:

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: • Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January. • Collections are expected to be 65% in the month of sale and 35% in the month following the sale. • The cost of goods sold is 80% of sales. • The company desires to have an ending merchandise inventory at the end of each month equal to 70% of the next month's cost of goods sol Payment for merchandise is made in the month following the purchase. • Other monthly expenses to be paid in cash are $21,100. • Monthly depreciation is $21,000. • Ignore taxes. Balance Sheet October 31 Assets Cash $ 25,000 Accounts receivable 77,000 Merchandise inventory Property, plant and equipment, net of $624,000 accumulated depreciation 162,400 1,026,000 Total assets $ 1,290,400 Liabilities and Stockholders' Equity Accounts payable $ 239,000 Common stock 740,000 Retained earnings 311,400 Total liabilities and stockholders' equity $ 1,290,400 Retained earnings at the end of December would be:

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter4: Accounting For Retail Operations
Section: Chapter Questions
Problem 4.2MBA: Sales transactions Using transactions listed in P4-2, indicate the effects of each transaction on...
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Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: • Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January. • Collections are expected to be 65% in the month of sale and 35% in the month following the sale. • The cost of goods sold is 80% of sales. • The company desires to have an ending merchandise inventory at the end of each month equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. • Other monthly expenses to be paid in cash are $21,100. • Monthly depreciation is $21,000. • Ignore taxes. Balance Sheet October 31 Assets Cash $ 25,000 Accounts receivable 77,000 Merchandise inventory Property, plant and equipment, net of $624,000 accumulated depreciation 162,400 1,026,000 $ 1,290,400 Total assets Liabilities and Stockholders' Equity Accounts payable $ 239,000 Common stock 740,000 Retained earnings 311,400 Total liabilities and stockholders' equity $ 1,290,400 Retained earnings at the end of December would be:
Transcribed Image Text:Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: • Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January. • Collections are expected to be 65% in the month of sale and 35% in the month following the sale. • The cost of goods sold is 80% of sales. • The company desires to have an ending merchandise inventory at the end of each month equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. • Other monthly expenses to be paid in cash are $21,100. • Monthly depreciation is $21,000. • Ignore taxes. Balance Sheet October 31 Assets Cash $ 25,000 Accounts receivable 77,000 Merchandise inventory Property, plant and equipment, net of $624,000 accumulated depreciation 162,400 1,026,000 $ 1,290,400 Total assets Liabilities and Stockholders' Equity Accounts payable $ 239,000 Common stock 740,000 Retained earnings 311,400 Total liabilities and stockholders' equity $ 1,290,400 Retained earnings at the end of December would be:
Retained earnings at the end of December would be: Multiple Choice $347,200 $325,100 $353,400 $311,400
Transcribed Image Text:Retained earnings at the end of December would be: Multiple Choice $347,200 $325,100 $353,400 $311,400
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